Discuss the arguments for and against the legalization of cannabis and the taxation of the good by the government.
Legalizing cannabis and applying a tax to the property has several advantages.
- The government can increase the income of the tax. As demand is likely not to be elastic, tax revenues could be quite high. Tax revenues could be used to help finance medical care and treat lung cancer. (things associated with smoking drugs)
- It would reduce the size of the underground economy. If cannabis were legalized, it would reduce criminal activity. It would also free up police time to investigate more serious crimes and drug use.
- Taxation of cannabis should avoid “excessive use” Although cannabis could be legalized, it is advisable to discourage consumption through taxes. Cannabis can be considered a good demerit because
- People underestimate the dangers of smoking (long-term memory loss, increased risk of psychosis)
- Smoking has negative externalities. Drug smokers are less productive when they are drugged. Increase the risk of accidents if you are driving when you are tall.
Therefore, we charge people the social cost of cannabis by taxing the goods. This can achieve social efficiency and reduce excessive use of cannabis.
4. Prevent dangerous forms of cannabis
In the black market, people don’t know what they’re buying. People often buy cannabis
Arguments Against legalisation of Cannabis / Dope
- If the tax is too high, people can still consume on the black market.
Therefore, there will be tax evasion, the government will not get the money and the criminal activity will continue. (It is already a real problem for cigarettes)
- It can encourage the drug tourist, as in Amsterdam: they will spend money in the UK, but is it the kind of tourist we want to encourage?
- Legalization can encourage more people to use cannabis because it is now considered acceptable.
- Some argue that if you decriminalize cannabis, it could encourage the use of other more dangerous drugs like ecstasy. However, it might work differently, because if cannabis were legalized, people could buy drugs from a reputable store instead of a drug dealer.
Also known as: cannabis / marijuana / hemp / grass / drug / grass
Decriminalization of cannabis
Should drugs be legalized?
- Cannabis use on the BBC